Muthoot FinCorp eyes $300 million IPO amid volatile market conditions - Report

Muthoot FinCorp, a gold loan-focused non-banking financial company, is planning an initial public offering that could raise as much as $300 million, according to a Bloomberg report citing people familiar with the matter.

Muthoot Fincorp is distinctly different from Muthoot Finance, which is listed. Though they are from different branches of the same Muthoot family originally. Muthoot Finance is already listed.

IPO plans take shape

The Kerala-based company is part of the Muthoot Pappachan Group. It is currently in discussions with investment bankers to advise on the proposed share sale, Bloomberg reported. A formal appointment of bankers is expected in the near future, the report said, citing sources.

Financalexpress.com could not verify the news independently.

The proposed IPO is likely to include a mix of fresh issue of shares and an offer for sale by existing investors, according to Bloomberg. The listing could take place later this year, although timelines are yet to be finalised and could change.

A spokesperson for Muthoot FinCorp told Bloomberg that bankers have not been hired so far.

Gold loans drive growth, but sentiment weakens

The planned IPO comes at a time when gold loans have emerged as one of the fastest-growing segments in India’s retail credit market. Bloomberg noted that rising gold prices and demand for short-term liquidity have been key drivers behind this growth.

However, the broader market environment has turned more uncertain in recent weeks. A sharp correction in equities this month has dampened investor sentiment for new listings, the report said.

Bloomberg pointed out that Walmart-backed PhonePe recently put its IPO plans on hold, highlighting the challenges companies face in tapping public markets at the moment.

Business profile

Founded in 1997, Muthoot FinCorp is a non-deposit-taking financial company that primarily lends against gold jewellery. Over the years, it has also diversified into secured and unsecured lending to micro, small and medium enterprises, according to Bloomberg.

The company employs more than 23,000 people and operates a network of over 3,700 branches, as per information cited in the report.

Details still evolving

Bloomberg reported that discussions around the IPO are still ongoing, and key aspects such as size, structure and timing of the offering could change. For now, while the company is preparing for a potential market debut, much will depend on how market conditions evolve in the coming months.